§ Mr. Andrew F. Bennettasked the Secretary of State for Social Services what is the tax threshold for a single person, a married couple, a married couple with one child and a married couple with two children in the tax year 1980–81; whether the invalidity benefit for each of these groupings is above or below the tax threshold; what additional income each of these units claiming (a) invalidity benefit, (b) sickness benefit, and (c) unemployment benefit, needs to make them eligible for tax equivalent to the proposed five point reduction.
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§ Mr. Peter Rees[pursuant to his reply, 24 April 1980, c. 274]: The figures for
Receipt of invalidity pension and allowances in 1980–81 Tax threshold 1980–81 No allowance Lower rate Middle rate Higher rate Single … … 1,375 1,260 1,344 1,428 1,525 Married … … 2,145 2,017 2,101 2,184 2,282 Married, one child … … 2,145 2,393 2,478 2,561 2,658 Married, two children … … 2,145 2,770 2,854 2,937 3,034 If the pensions and allowances were to be increased by 16½ per cent. rather than 11½ per cent. and made fully taxable, and the benefit were to be made taxable this year, the income other than benefit needed to produce a tax liability in 1980–81, on the assumption that child dependency additions would not be taxed, equal to the five points abatement of the benefit increases would be:
single £ Married £ No allowance 163.10 205.70 Lower rate 81.00 123.60 Middle rate 1.90 44.50 Higher rate Appropriate liability arises even without extra income. The above calculations assume that the persons concerned were drawing invalidity benefit throughout the whole tax year. No such assumptions could be made in relation to the recipients of short-term benefits such as unemployment or sickness benefit: no figures can therefore be given in respect of these.
These calculations have been made in respect of the tax year 1980–81. Comparable
INCOME TAX PAYABLE BY BENEFICIARIES RECEIVING Benefit invalidity Pension only Invalidity Pension and lower Invalidity Allowance invalidity Pension and middle invalidity allowance Invalidity Pension and higher Invalidity allowance Up rating … … 11½% 16½% 11½% 16½% 11½% 16½% 11½% 16½% Single … … 0 0 0 0 15.81 22.83 44.97 52.53 Married … … 0 0 0 0 11.85 22.65 41.01 52.35